Smarter Manufacturing: Six Opportunities Manufacturers Have To Pounce Upon

Intelligence must become a top priority in manufacturing -- it has to be planned, implemented, managed and invested in.

The science and art of manufacturing is ready to be re-imagined, reinvented and reborn. We in the manufacturing industry have beaten the living pulp out of the old model; we've simplified, proceduralized, componentized, marginalized, commoditized, and then automated, accelerated, then Six Simgmaed and TQMed, and then beat on our suppliers and coddled our customers until we cemented our manufacturing operations into a proud mechanical monolith.

But now it's all got to change. Get ready for the new era.

Manufacturing excellence used to be about the margins and effectiveness of supplies, plants, inventories and assets. Could we ever imagine that there was intelligence to be garnered from those cold inventories and mindless machines? Can manufacturing be made smarter?

Today, there are one billion transistors for each person on the planet. This year, 30 billion RFID tags will be embedded into our world and across entire ecosystems1. Pretty soon, our inventories, our heavy assets, our supply chains will be speaking to us. They will have their own Internet and networks. They'll be writing tomes and shouting out loud about where they are, what they are doing, what they need, and how much money they are making. But will we listen to them? Are we ready to hear what they are saying? We better, because that's how leaders in the new era will make decisions and beat their competitors.

The pace of change is accelerating for everyone. Manufacturers of all kinds feel these shifts and challenges. Increasingly complex supply chains and empowered consumers change how the manufacturer's world is connected economically, socially and technically. In just years, auto manufacturers were able to reduce an auto engineering cycle time from 48 months down to 24 months and even to a 75% decrease to 18 months.

Think about the over $13 billion U.S.-based automotive warranty claims in 2008 -- an insane amount of defects. At the same time, a forward-looking European Automotive OEM implemented a new diagnostic system combining symptom probability with code analysis to reduce vehicle misdiagnoses. Warranty costs were reduced significantly, while customer satisfaction increased because 90% of vehicle failures are diagnosed in a first-pass analysis inside of 15 minutes.

Can a smarter manufacturing operation spell overall performance? Since 2004, 22 major auto plants have been closed in the United States, with another 16 to follow by 2011. Most were configured for one chassis or platform, two to four models, limited flexibility, and a push model to the market.

Now consider Fiat's Tychy plant in Poland. They are planning to hire 300 new workers and its output is expected to hit a record 600,000 cars in 2009. It's configured for six platforms, up to twenty-four models cross brand flexibility, and production based on market response.

These types of evolutionary and revolutionary change in manufacturing present as many questions as they do answers for forward-thinking manufacturing leaders. What has become apparent is that the era of one-size-fits-all for manufacturers has come to an end. Customization and specificity are new modes of operation, whether it is how a manufacturing plant designs its processes and system; how they manage their people and resources; or how they deliver products to consumers and businesses.

The crux of all this lies in making manufacturing smarter. And smarter requires two critical changes: the ability to produce new information (such as through RFID instrumentation and connecting systems) and the ability to see, make sense of, and act on that information. This is often described in terms such as information management, business analytics, and manufacturing optimization.

Through my experience with hundreds of manufacturers, I have gained insights on how manufacturers are becoming more flexible, agile, and efficient. I think there are six incredibly potent opportunities that the best manufacturers have to pounce upon if they wish to stay competitive through smarter manufacturing.

  1. Manufacturing Intelligence
    Intelligence must become a top priority in manufacturing -- it has to be planned, implemented, managed and invested in. It usually requires a completely new view and perspective on what is traditionally looked at as strictly a mechanical or procedural challenge. It will include advanced data collection from sensors and actuators; immediate knowledge of inventory, assets, production condition; and increased process, productivity and cost granularity.
  2. Predictive Analytics in Manufacturing
    Manufacturers have to take their manufacturing intelligence and use it in ways that will predict the future so that decisions and actions are taken before problems emerge, before risk events happen and before opportunities are squandered. This includes embedded analytics; enabling predictive technologies; and rapid response capabilities.
  3. Production Quality Management
    This is how manufacturers achieve nearly zero waste, zero incidents and zero emissions. The new improvements in quality will stem from information visibility, connectivity, and analytics.
  4. Integrated Scheduling and Operations Execution
    New techniques are being developed to completely change how manufacturing scheduling can make plants and factories more flexible, produce more, and support more product designs. Again, this is driven by sophisticated uses of information and includes: dynamic execution planning and scheduling; sense and respond capabilities; and advanced modeling.
  5. Manufacturing Visibility and Visualization
    Information is useless unless it helps you understand and act. Imagine being able to have a holistic, dynamic view of your operations in real-time, being able to visualize people, systems, assets, and inventories as they make their way through a complex supply chain. New instrumentation, networks, and control rooms will enable manufacturers to see multiple factories in a single view, utilize advanced manufacturing dashboards; and optimize their capacity across the entire enterprise.
  6. Manufacturing Network Monitoring
    The ability to see and act on your entire network enables you to predict problems, quickly deploy corrective actions (such as repairs) and keep the entire network humming. This leads to improved operational decisions; enhanced remote visibility; and lowest cost of production possible.

Each of these opportunities requires a new view of information as a vital asset. It requires a different view of the manufacturing operation, and in most cases, a wholly new competency. If any of these ideas frighten or excite you, it's because they are frightening and exciting. The only way to get into them is to take the plunge, get in deep, and embrace them whole-heartedly.

That's the only way we're going to make manufacturing smarter, and making it smarter is the only way to win.

Dave Miller is the Global Industrial Sector Leader for IBM Global Business Services. www.ibm.com/gbs

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